BusinessDay

N347bn submarine cables crash cost of satellite bandwidth

Prices of bandwidth supplied through satellite technology have dropped by 50 percent due to the proliferation of underwater cable infrastructure on Nigeria’s coastline, a report has shown. Bandwidth is a major ingredient for telecommunications service delivery, especially for data and video. According to the report, a mega byte per second (mbps) of bandwidth from satellite technology was sold at $7,200 few years ago. But currently, the same amount of bandwidth capacity is sold for $3,600 representing a 50 percent drop in price. Industry analysts have attributed this development to the considerable drop in the cost of bandwidth emanating from undersea cable infrastructure which cost between $300 and $500 in Lagos.

There are four undersea cables, including the Nigerian Telecommunications Limited (NITEL) in the country, providing a total of 7.78 terabits per second of bandwidth capacity. This, according to analysts is a major boost in the capacity available to drive bandwidth dependent services. The 7,000 kilometre MainOne cable, which went live in 2010 is valued at $240 million. The 10, 000 kilometre Glo-1 cable cost $800, 000 to build. Analysts place the worth of NITEL’s South Atlantic 3 (SAT-3) at about $600 million, while MTN’s West African Cable System (WACS) is about $600 million. This means that the total investments is about $2.24 billion (N347bn).

Prior to the coming of these underwater cables, the cost of a MEG of bandwidth was close to $1, 500. In spite of the price reduction at the wholesale international connectivity level, it has not trickled done to the end user. Kazeem Oladepo, legal counsel for MainOne cable gives reasons for this anomaly. The gap between the wholesale and retail service, according to him, has not been adequately bridged through infrastructure, which delays access and generally hinders end users from benefitting in corresponding proportion on the radical price reduction, combined with superior service quality.

Despite the huge price differentials between bandwidth from undersea cable and satellite technology, according to the report organisations and companies in the country and across the globe still subscribe to satellite bandwidth. Anurag Garg, managing director, Direct On PC, a major Internet Service Provider, was quoted in the report, saying due to the unstable nature of service from undersea cable which often times suffer from cuts that disrupt services, was a reason why big businesses subscribe to satellite service. Big organisations that want 100 percent internet without downtime subscribe to satellite, he added. Garg noted that absence of a national fibre network has compelled operators to use satellite technology to serve cities without requisite fibre infrastructure needed to link Lagos where the undersea cables land.

It was also learnt that the use of bandwidth from satellite technology accounts for 20 percent of the 200 STMs demanded by operators and organizations in the country. Satellite internet generally relies on three primary components: a satellite in Geostationary orbit, a number of ground stations known as gateways that relay the Internet signal to and from the satellite via radio waves (Microwave), and a VSAT (Very-small-aperture terminal) dish antenna with Transceiver, located at the subscriber’s home or business.

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